Definitions That Were Missing Flashcards
An individual or institutional investor who meet certain minimum requirement relating to income, net worth, or investment knowledge. Also referred to as a sophisticated investor.
Accredited investor
A charge levied by some mutual funds when clients close their accounts
Account closing fees
A plan offered by mutual fund company that enables investors to make automatic periodic purchases of units of a particular mutual fund.
Accumulation plan
Also known as front end load.
Acquisition fee
An investment management style employed by managers who believe financial markets present occasional inefficiencies which can be exploited to earn excess returns. Proponents of this approach will try to add value through strategies such as market timing and individual security selection.
Active portfolio management
The deemed cost of an asset representing the sum of the amount originally paid plus any additional costs, such as brokerage fees and commissions
Adjusted cost basis
Provincial and territorial securities administrators such as securities commissions or other regulatory bodies that operate within the provincial and territorial governments. Powers and operations include registration, disclosure, and investigation and prosecution.
Administrative bodies
A statistical measure of the value a fund manager adds to the performance of the fund managed. If output is positive, the manager has added value to the portfolio. If the offer is negative, the manager has underperformed the market.
Alpha
Professionally managed portfolios of basic asset classes and/or commodities and include segregated funds, hedge funds, commodity pools, exchange – traded funds, income, trusts, closed – end funds and principal protected notes.
Alternative managed products
Gradually writing off the value of an intangible asset over a period of time. Commonly applied to items such as goodwill, improvements to leased premises, or expenses of a new stock or bond issue.
Amortization
The period during which the entire principal amount of the mortgage loan is to be repaid to the mortgagee.
Amortization period
This cost reflects the fact that mortgages might have entered the portfolio when the market rate for them was different from their fixed rate.
Amortized cost
A document that contains information not included in a simplified prospectus or annual financial statements.
Annual information form
The person on whose life insurance benefits are based.
Annuitant
A sum of money invested with the life insurance company that is paid out to the investor based on a predetermined formula. The annual payouts are composed of both the initial amount invested and returns generated.
Annuity
Firms that engage in the business of collecting mutual fund performance information and report this information on a regular basis.
Appraisal firm’s
The simultaneous purchase and sale of securities traded on different exchanges.
Arbitrage transactions
I somewhat in accurate method of calculating average annual return. It involves adding up the annual returns and dividing by the number of years.
Arithmetic mean
The lowest price at which a seller will except for the financial instrument being quoted.
Ask price
The weight of the various components [Cash, debt, equity, and money market securities] of and investors portfolio.
Asset allocation
All things of value that are owned by a firm or individual.
Assets
The assets managed by an investment firm
Assets under management
Markets in which securities are bought and sold by brokers acting as agent for their clients, in contrast to a dealer market where trades are conducted over the counter. For example, the Trono stock exchange it is an auction market.
Auction market
A professional review and examination of the company’s financial statements required under corporate law for the purpose of ensuring that the statements are fair, consistent and confirm with international financial reporting standards.
Audit
An independent report on the accuracy and validity of the company’s financial statements.
Auditors report
A method that allows people to estimate the probability of an outcome based on how prevent or familiar that outcome appears in their lives.
Availability
A statistical tool used to measure the direction of the market. The most common average is the Dow Jones industrial average.
Average
The average of the simple annual returns earned over investment over a given number of years.
Average annual return
A type of sales fee that is paid by the investor when the funds are redeemed or sold. This fee is calculated on either the initial purchase value or the current price which includes any increase in value.
Back end load
Accounts maintained by a country to record international activities, such as foreign trade and international borrowing and lending. Balance of payments accounts actually comprised two separate accounts: the current accounts and the capital account.
Balance of payments
Hold a diversified portfolio of different types of securities: bonds, stocks, and money market securities. Often, the fund manager will vary the proportions depending on market conditions.
Balanced mutual funds
The minimum rate at which the Bank of Canada will lend money on a short-term basis to the chartered banks and other members of the comedian payments Association in its role as a lender of last resort.
Bank rate
A commercial draft drawn by a bore were for payment on a specified date. ABA is guaranteed at maturity by the borrowers bank. As with T-bills, BAs are sold at a discount and mature at their face value, with the difference representing the return to the investor. BAs may be sold before maturity at prevailing market rates,generally offering a higher yelled then Canada T-bill
Bankers acceptance
0.0001
Basis point
Assisting decline in equity prices. Bear markets are usually associated with a downturn in the business cycle.
Bear market
A bond that is not registered in the name of a particular investor and can be negotiated by any holder
Barrar bond
Systematic errors in financial judgment or imperfections in the perception of economic reality.
Behavioral biases
A field of study that combine psychology and economics to explain why and how investors act and how that the behavior affects financial markets.
Behavioral finance
And index or fund that enables you to compare the success of the fund or portfolio manager.
Benchmark
And index that reflects a mutual fund investment universe and can be used as a standard against which performance can be measured.
Benchmark index
The person who will receive the benefits payable under the contract upon death of an annuitant.
Beneficiary
An asset allocation where the risk and return levels are adjusted based upon the clients behavioral tendencies. The best practical at location may sweetly underperform over the long-term, but is in a location that the client can comfortably adhere to over the long run.
Best practical allocation
The standard measure of market risk. It shows how much a security or portfolio fluctuates when the market as a whole fluctuates.
Beta
Personal believes that may lead to irrational or emotional choices and decisions
Biases
The highest price at which a buyer will pay for the financial instrument being quoted.
Bid price
Those that hold the ultimate responsibility for mutual funds activities, ensuring that the investments are in keeping with the funds investment objectives.
Board of directors
A bond is a dead security then maybe issued by either a government or a corporation. The issuer of a bond promises to pay stipulated rate of interest and to pay back the principal or par value add maturity.
Bond
A fixed income fund that invests principally in government and corporate bonds
Bond fund
The person responsible for ensuring compliance with the regulatory requirements within the branch by monitoring the conduct of the mutual fund sales people
Branch compliance officer
General and prolonged rising trend insecurity prices. Bull markets are usually associated with an expansionary phase of the business cycle. As a memory aid, it is said that a bull walks with its head up while a bear walks with his head down
Bull market
A series of short-term fluctuations of national income over definite periods.
Business cycle
It is measured by the difference between the securities par value and the price the issuer must pay to call it for retirement
Call premium
May be redeemed upon due notice by the securities issuer
Callable preferred
And incentive program for those investing any registered education savings plan whereby the federal government will make a matching grant of a maximum of $500-$600 per year for the first $2500 contributed each year to the RESP of a child under age 18.
Canada education savings grants
A government-sponsored pension plan to which all employed residence in Canada contribute. Contribution to the blends is automatic. Starting from age 65, pensioners receive a modest monthly amount
Canada pension plan
I relatively new type of savings products that offers a higher interest rate compared to the Canada savings bond and is redeemable once a year on the anniversary of the issue date or during the 30 days thereafter without penalty
Canada premium bond
A type of savings product that pays a competitive rate of interest and that is guaranteed for one or more years. Not to be confused with marketable government bonds. Can Canada savings bonds do not trade on the secondary market – they are sold back to the government at par value plus accrued interest at any time. Canada savings bonds are registered in the name of an individual and,because of the redemption features, or not subject to interest rate risk like ordinary bonds
Canada savings bonds
The body that oversees mutual fund classification. The CI FSC tracks investment funds on the security by security holdings basis
Canadian investment funds standards committee
I non-for profit organization that establishes, operates, and maintains systems for the clearing and settlement of payments among member financial institutions on behalf of their clients – individuals, businesses, and governments.
Canadian payments association
Has two distinct but related meetings. To an economist, it means machinery, factories and inventory required to produce other products. To an investor, it may mean the total of financial assets invested in securities, a home and other fixed assets, plus cash.
Capital
One of the two accounts of the balance of payments that records the flow of payments between countries to finance the acquisition of assets such as stocks, bonds, and real estate.
Capital and financial account
When an investor cells and asset for more than its purchase price, I capital game is realized. Only 50% of capital gains is taxable; 50% remains tax-free.
Capital gain
An investment with the return objective will have an appreciable level of risk and will be expected to increase in value over the long-term. See also capital gains.
capital growth
Selling a security for less than its purchase price. Capital losses can only be applied against capital gains. Surplus of losses can be carried forward in definitely and used against future capital gains. Only 50% of the loss can be used to offset any taxable capital loss.
Capital loss
Pension is calculated as a percentage of employees earnings over the course of her career [While in the plan]. Employees may contribute a fixed percentage of their salary [such as 5%] to the type of plan. Employer contributions required to fund the defined-benefit very according to factors such as investment yield, morality and employee turnover.
Career average plan
In the case of RRSPs, it refers to unused contribution room that can be used to reduce taxable income in future.. In general, unused contributions can be carried forward in definitely.
Carry forward
An account in which no borrowing is permitted
Cash account
The amount of money coming in from all sources of income and the amount of money going out to pay bills.
Cash Floaw
A ratio that gages a companies ability to repay the funds it has borrowed. Cash flow divided by total debt ratio equals cash flow divided by total debt.
Cash flow from operations divided by total debt ratio
The central bank process of controlling the national money supply through the buying and selling of bonds in the markets
Cash management
The opposite of a nominee account. The client name account is in the account registered directly in the name of the client of the account with the mutual fund.
Client name account
This involves fully understanding and satisfying unique needs of each client.
Client service
Can often be repaid prior to the end of the term, but a penalty will apply.
Closed mortgage
Funds that have the flexibility to buy back their outstanding shares periodically.
Closed end discretionary funds
Shares of these funds are bought and sold on the open market. A fixed number of shares are issued and their value depends on market demand and on the value of the securities held by the fund.
Closed end fund
A code that establishes norms based upon the principles of trust, integrity, justice, fairness, honesty, responsibility and reliability.
Code of ethics
Basic statistical, information processing or memory errors that are common to all human beings. They can be thought of as blind spots or distortions in the human mind
Cognitive bias
A state of mental imbalance that occurs when contradictory cognitions bump into one another. This can occur when people are presented with information that conflicts with pre-existing beliefs.
Cognitive dissonance
Economic indicators that behave similarly and simultaneously with economy. Coincident indicators help economist to determine which phase of the business cycle and economy is currently in. Examples include gross to Mestic product, personal income, and retail sales.
Coincident indicators
Secures a bond by a pledge of an asset in the case of default
Collateral
The short-term debt security who is issuer promises to pay the maturity value by a stated date. Commercial paper is issued by very creditworthy companies and is therefore quite liquid.
Commercial paper
A special type of mutual fund that can employ leverage and engage in short selling using derivatives
Commodity pools
A comment share is said to represent residual ownership of the issuing company and is therefore entitled to a boat at shareholder meetings. It does not have a stated maturity date and is only paid dividends once preferred shareholders have been paid.
Common shares
A collection of portfolios that form the basis for comparison.
Comparison universe
Fulling the rules, whether those rules or legal requirements or dealer policies
Compliance
A reading indexed published monthly by the McDonald Laurier Institute which tracks the performance of the Canadian economy. The MLI index tracks the performance of nine components, and is published the last week of every month.
Composite leading index
The fact of reinvesting the returns on investments, so that investors can earn a return on a return.
Compounding
ETFs are not subject to individual stock or sector exposure limits that normally are part of the mutual funds investment objective. If particular sectors have had extraordinarily large gains, then it is possible for the ETF to be highly concentrated in a single stock [in excess of 10%] or sector [in excess of 40%].
Concentration risk
All information concerning the clients transactions and his or her accounts must be considered confidential and must not be disclosed except with the clients permission, for supervisory purposes or by order of the proper authority.
Confidentiality
A measure of the average of the prices paid for a basket of goods and services compared to a base year.
Consumer price index
The owner of the segregated fund contract
Contract holder
The phase of the economic cycle of that follows the peak drinking a contraction, economic activities decline
Contraction
A monetary policy that seeks to reduce the size of the money supply
Contractionary
Transferring securities into an RRSP. The general rules are that when an asset is transferred there is a deemed disposition. Any capital gains would be reported and taxes paid. Any capital losses that result cannot be claimed.
Contribution in kind
If you do not contribute the maximum allowable amounts to your RRSP in any given year, you can carry forward the unused contribution indefinitely to future years. The contribution room is the annual unused contribution carried forward.
Contribution room
When the amount of the mortgage loan does not exceed 75% of the appraised value of the pledged property.
Conventional mortgage
Can be converted to a given number of common shares, generally of the same company. Conversion is usually permitted during periods determined by the issuer or the issuer can force conversion if market conditions warrant it
Convertible bond
Can be converted to a given number of common shares, generally of the same company. Conversion is usually permitted during periods determined by the issuer or the issuer can force conversion if market conditions warrant it
Convertible preferred
Are issued by corporations mainly to finance the acquisition of equipment. They are subject to interest rate risk but, unlike government bonds, or also subject to default risk. Often, specific assets are pledged as collateral to guarantee a repayment of the debt.
Corporate bonds
A statistical measure of the degree to which the returns on a security or associated with the returns on another security.
Correlation
A type of inflation that develops due to an increase in the cost of production. For example, an increase in the price of oil may contribute to hire input costs for a company and could lead to higher inflation.
Cost push inflation
The promise made by the bond to make semi annual payments to the bondholder
Coupon
The periodic [almost always semiannual] interest payment that the issuer of a bond has promised to pay the bondholder.
Coupon rate
The grading of the company based on the company’s ability to pay back credit. High credit rating meaning means that the company is very likely to pay back loans and is not a default risk.
Credit rating
